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Meat ‘sticker shock’ looms with no end to worker shortfall

Meat ‘sticker shock’ looms with no end to worker shortfall

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USDA meat cuts processing plant

With the pandemic igniting a collective reassessment of work, imagine posting openings for jobs that could require standing for 12-hour shifts, working six-day weeks and repeatedly lifting 70-pound objects in conditions that range from steaming hot to bloody and ice cold. And on top of all that, your industry recently made headlines for COVID-19 outbreaks that killed workers.

This is precisely what meatpackers are facing.

Of all the industries experiencing crunches for hourly labor, it’s hard to find one with a greater recruiting challenge. Companies have tried all the usual tricks to lure applicants, including offering signing bonuses of as much as $3,000, but they’re still short workers and, as a result, there are an increasing number of sparse shelves.

For America’s meat eaters, this is a problem. Some cuts have soared 25% over the past year, while others are fetching near-record prices, making meat one of the biggest contributors to pandemic inflation. And industry experts expect meat to keep gaining through the holidays and beyond.

“The sticker shock is what we all need to be prepared for,” said Bindiya Vakil, chief executive officer of supply-chain consultant Resilinc. “This is here to stay, at least through the summer of 2022.”

Before COVID, meat processors struggled to meet their labor needs, which increased the hiring of immigrant workers mostly from Mexico.

The pandemic only exacerbated the hiring woes, while raising new concerns about how meatpackers will recruit in the long term. The industry expected the labor shortage to get easier after extra unemployment benefits in COVID relief ended in September, but it hasn’t. Across the overall job market, the number of people quitting is surging and job openings remain near all-time highs. Online postings for meat processing positions are up 66% from a year ago, according to Emsi Burning Glass, an analytics firm.

“Employers are going to get increasingly desperate,” said Ron Hetrick, senior labor economist at Emsi Burning Glass.

Meanwhile, retailers and shipping companies are adding to the pressure with plans to hire hundreds of thousands of workers for the holidays. Amazon alone aims to bring on 150,000 temps, a 50% increase from a year ago, at an average starting hourly wage of at least $18, which exceeds or matches a lot of meat processing jobs. The labor battle in retail has been intense for years, pushing chains to boost pay and add benefits such as parental leave and college reimbursement.

Christopher Young, executive director for the American Association of Meat Processors, said there isn’t an easy answer. But the industry is working to establish butcher programs at colleges and internships. He also said meatpackers need to get better at marketing their career opportunities, a hurdle facing other fields that rely on blue collar workers.

“It can be difficult to compete with some of the wages being offered, as well as the type of work,” said Young, who has been with the trade group since 2013. “Our industry can be hard work, but also rewarding as you are meeting the needs of feeding people. It is going to take a while to get people back to work.”

Smithfield Foods, the world’s biggest pork producer, is paying workers more, but also touting perks like $2,500 relocation payments and Walmart gift cards. Rival JBS SA is offering signing and retention bonuses totaling $3,200. And it’s trying to lure people to job fairs with free lunch.

“It’s been a challenge,” said Jim Monroe, vice president of corporate affairs for Smithfield.

Meat processors can also invest in automation to boost productivity and reduce labor, according to Glynn Tonsor, a professor of agricultural economics at Kansas State University. However, the industry has been pursuing this for years with little to show for it, he said. It’s also pushing for the federal government to expand work visas.

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